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The Construction of an Asset Index at Household Level and Measurement of Economic Disparities in Punjab (Pakistan) by using MICS-Micro Data

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Listed:
  • Tanveer Ahmed Naveed

    (University of Gujrat
    University of Bristol)

  • David Gordon

    (University of Bristol)

  • Sami Ullah

    (University of Gujrat)

  • Mary Zhang

    (University of Bristol)

Abstract

The main objectives of this study are to construct a valid and reliable asset index at household level and to estimate economic disparities in 36 districts of Punjab (Pakistan) by using Multiple Indicator Cluster Survey micro-data. An asset index may be a better measure than current income or expenditure for gauging a household’s long-term capacity for buying goods and services and its potential resilience to economic shocks. This paper provides details of the results from Exploratory Factor Analysis (EFA) and Tetrachoric Principal Component Analysis (PCA) for the dimensional structure of assets. We have applied Classical Test Theory (CTT) and Item Response Theory (IRT) in order to construct a reliable household level asset index. In Punjab, Lahore has the highest asset index score followed by Gujrat and Sialkot. Gini-coefficient index and the Palma ratio analyses show that the asset distribution in the district of Rajanpur is highly unequal.

Suggested Citation

  • Tanveer Ahmed Naveed & David Gordon & Sami Ullah & Mary Zhang, 2021. "The Construction of an Asset Index at Household Level and Measurement of Economic Disparities in Punjab (Pakistan) by using MICS-Micro Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 155(1), pages 73-95, May.
    • Handle: RePEc:spr:soinre:v:155:y:2021:i:1:d:10.1007_s11205-020-02594-3
    DOI: 10.1007/s11205-020-02594-3
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    More about this item

    Keywords

    Asset index; Classical test theory; Item response theory; Exploratory factor analysis; Gini-coefficient; Palma ratio; Punjab;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • P36 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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